MODULE 1 TO 4 PRELIM EXAM

1. Entrepreneurial actions begin at the of a lucrative opportunity

and an enterprising individual. NEXUS

2. An entrepreneurial opportunity could stem from:

a) new market

b) new product for an existing market

c) new product for new market

d) all of the above

3. A model explains how knowledge and motivation influence

two stages of entrepreneurial action. MCMULLEN – SHEPHERD

4. Acting on and pursuing the identified opportunity involves

entrepreneurial venture. FALSE (thinking)

5. Entrepreneurs sometimes make decisions in highly uncertain

environments, with high stakes and immense time pressures.

TRUE

6. Forming opportunity beliefs often requires creative mental leaps

launched from the entrepreneur’s existing knowledge. TRUE

7. Superficial similarities and structured similarities between the

source (e.g., the market) and the destination (e.g., technology) help

the entrepreneur make these creative mental leaps. FALSE

(structural)

8. Entrepreneurs doesn’t lack resources. FALSE (often)

9. They sometimes seek resources from others to provide the slack

necessary to experiment and generate entrepreneurial

opportunities or engage in bricolage. TRUE

10. It is the process of “making do,” entrepreneurs can create

opportunities. BRICOLAGE

11. Involves thinking of a desired outcome and then coming up witha

plan to achieve that outcome. CAUSAL PROCESS

12. Looks at what a person has and then selects from several

possible outcomes. EFFECTUATION PROCESS

13. Most managers need to take an entrepreneurial mind-set.

TRUE

14. To develop entrepreneurial mindset manager must

a) attempt to make sense of opportunities

b) constantly questions their dominant logic

c) revisit what they think true about markets and firms

d) all of the above

15. The extent entrepreneurs are dynamic, flexible, self-regulating,

and engaged in sensing and acting on changes in their

environments. COGNITIVE ADAPTABILITY

16. To be good at effectuation, you must not have cognitive

adaptability. FALSE (must have)

17. What are the four areas of cognitive questions:

a) comprehension questions

b) connection task

c) strategic task

d) reflection task

e) all of the above

18. Those able to increase cognitive adaptability can adapt to

newsituations, be creative, and communicate their reasoning.

TRUE

19. Entrepreneurial action is most often intentional. TRUE

20. Refers to the conviction that one can successfully execute

thebehavior required. ENTREPRENEURIAL SELF – EFFICACY

21. Refers to an individual’s attitude toward entrepreneurial action.

PERCEIVED DESIRABILITY

22. The degree to which the entrepreneur has a favorable or

unfavorable evaluation of the potential entrepreneurial outcomes.

PERCEIVED DESIRABILITY

23. Plays a role in the growth and success of a new venture.

WORKHISTORY

24. Most entrepreneurs are between 22 and 35 when starting

theircareer. FALSE (22-45)

25. A broad knowledge allows for the discovery of

potentialopportunities and assists adaptability. EDUCATION

26. A is an important factor influencing an

entrepreneur’scareer path. ROLE MODEL

27. The entrepreneur should establish a moral-support network of

family and friends. TRUE

28. The entrepreneur also needs advice and counsel obtained from

members of a professional-support network. TRUE

29. Entrepreneurial activity is embedded in networks of

relationships. INTERPERSONAL

30. is focused on preserving nature, supporting life and community

in the pursuit of opportunities to bring future products and services

into existence for gain. SUSTAINABLE ENTREPRENEURSHIP

31. Those with greater knowledge of the natural environment

are more likely to notice changes in the environment that

form opportunities. TRUE

32. Entrepreneurs can generate wealth. ECONOMIC

33. Are those factors that are inputs into the formulation of the

firm’sstrategy. STRATEGIC ORIENTATION

34. Allows firms to rapidly pursue opportunities, seizing windows of

opportunity. ENTREPRENEURIAL ORIENTATION TOWARD

OPPORTUNITY

35. Entrepreneurial management is driven by opportunity,

notresources. TRUE

36. Both entrepreneurship and strategy have important

implicationsfor the performance of the firm. TRUE

37. Minimizes resources needed to pursue an opportunity.

ENTREPRENEURIAL ORIENTATION TOWARD THE

COMMITMENT OF RESOURCES

38. Entrepreneurially managed firms are less concerned about ownership of resources than about access
to others’ resources. TRUE

39. Is organic with few layers and many communication channels. ENTREPRENEURIAL
ORIENTATION TOWARD MANAGEMENT STRUCTURE

40. Is suited for internal efficiencies of allocating controlledresources. TRADITIONALLY MANAGED

FIRM’S STRUCTURE

41. Focus on pursuing opportunity representing new value for the firm, they have an entrepreneurial
philosophy towards rewards. ENTREPRENEURIALLY MANAGED

FIRMS
42. Has a strong desire to expand the firm, rapidly.

ENTREPRENEURIAL ORIENTATION TOWARD GROWTH

43. Distinguishes entrepreneurially and traditionally managed firms.

CULTURE

44. Encourages the generation of ideas, experimentation, and creative output. ENTREPRENEURIAL
ORIENTATION TOWARD CULTURE

45. Focuses on the loss event to create an account of the failure.

LOSS ORIENTATION

46. Uses distraction to focus energy on other problems.

RESTORATION ORIENTATION

47. Requires oscillating between two alternate approaches to loss.

DUAL PROCESS

48. NEW BUSINESS VENTURE – creating of new business within org.

ORGANIZATIONAL INNOVATIVENESS – product & serviceinnovation in technology

SELF – RENEWAL – transformation of an org thru renewal key andideas built

PROACTIVENESS – initiative, boldness reflected in orientation and act by top management

49. Action within organization – CORPORATE ENTREPRENEURSHIP

50. Managers supporting corporate - TOP MANAGEMENT COMMITMENT

51. One of the essential acts of entrepreneurship. NEW ENTRY

52. Maximizes benefits of newness and minimizes its costs.

ENTREPRENEURIAL STRATEGY

53. Are the building blocks, combined in various ways to achievesuperior performance. RESOURCES

54. Deeper than knowledge gained through market research.

ENTREPRENEUR’S MARKET KNOWLEDGE

55. Is knowledge built up over time through experience –idiosyncratic, therefore rare.
ENTREPRENEURIAL RESOURCES
56. Often leads to new markets rather than meeting unmet market needs. ENTREPRENEURS
TECHNOLOGICAL KNOWLEDGE

57. Less about if the opportunity exists and more about the entrepreneur believing they can make it work
with entrepreneurial strategies. ASSESSMENT OF A

NEW ENTRY’S ATTRACTIVENESS

58. Offers a small product range to a small number of customer groups. NARROW – SCOPE
STRATEGY

59. Takes a “portfolio” approach and offers a range of products.

BROAD - SCOPE SRATEGY

60. Another strategy for minimizing risk. IMITATION

61. Variations may be minor product changes, entering new markets, or delivering the product in a
different way. ME – TOO STRATEGY

Identify a characteristic of focus groups.

They are used to filter ideas and concepts.

The method that stimulates people to be creative by meeting with others and participating in an
organized group experience is known as ________.

Brainstorming

A true statement about brainwriting, a method to generate ideas, is that _____.

it provides participants more time to reflect on an idea than in a brainstorming session

Which of the following is true of problem inventory analysis?

It is utilized to test and screen new product ideas

Creative (box answer: Problem) (solving) is a way of using your creativity to develop new ideas by
focusing on specific parameters.

People who are in focus groups are most likely to _____.

 participate in open, in-depth discussions

In the context of creative problem solving, a brainstorming session should _____.

begin with a problem statement that is neither too broad nor too narrow

What are the rules of brainstorming? (Check all that apply.)

Combinations and improvements of ideas are encouraged.

A high number of ideas should be generated.
Freewheeling is encouraged.

The type of brainstorming in which criticism is allowed and new ideas are obtained by focusing on the
negative is known as ________ ________.

Reverse brainstorming

In the context of methods to generate ideas, which of the following is true about brainwriting?

It is a silent, written creation of ideas by a group of individuals.

Which of the following is a creative problem-solving technique that begins with group members not
being aware of the exact nature of the problem to be solved?

The Gordon method

________ ________ ________ is a method for obtaining new ideas and solutions by focusing on
problems.

problem inventory analysis

In the ________ method, a new idea is developed through a list of related issues or suggestions.

Checklist

An attribute of creativity is that _____.

it can be suppressed by perceptual and cultural elements

Which of the following is true of free association?

It is particularly useful in creating a completely new slant to an issue.

The technique that is probably the most well known and widely used both for creative problem solving
and in idea generation is _____.

Brainstorming

The process of forcing relationships among some product combinations is referred to as ________
________.

Forced Relationship

Identify an accurate statement about reverse brainstorming.

It normally involves the identification of all of an idea's problems.

In the ________ ________ method, a small notebook that easily fits in a pocket is distributed and new
ideas are developed by an individual or a group, with the ideas being regularly recorded.

collective notebook

Arrange the steps involved in the Gordon method that is used by an entrepreneur for creative problem
solving in the correct order of occurrence. (Place the first step at the top).

1. The entrepreneur mentions a general concept related to a problem.

2. A group articulates a number of ideas.
3. Through guidance by moderators, a concept is developed, followed by the development of
related concepts.
4. The real problem is revealed by the entrepreneur.

A true statement about attribute listing is that _____.

previously unrelated objects are brought together to form a new combination

When an entrepreneur seeks to use the checklist method, he or she should ensure that the method is
only used to develop completely new ideas.

False
The ________-________ approach to coming up with a new idea requires that an entrepreneur dream
about a problem and its solution.

Big dream

Developing an entirely new idea through a chain of word associations is known as _____.

Free association

Identify the key facets of parameter analysis. 

Creative synthesis
Parameter identification

Arrange the following steps of the forced relationships process in the correct order.

1. Isolate the key aspects of an issue.

2. Discover the relationships between the key aspects of an issue.

3. Document the relationships between the key aspects of an issue in a structured form.

4. Evaluate the resulting relationships to locate ideas or patterns.

5. Develop new ideas from analyzed patterns.

Arrange the following types of innovation in decreasing order of uniqueness 

-Breakthrough
-technological
-ordinary

An accurate statement about the collective notebook method is that _____.

a list of best ideas is developed considering all the ideas that have been recorded

Match the following innovations based on the disrupting influence that use of a new product has on
established consumption patterns (in the left column) with their descriptions (in the right column).
Continuous innovations
Least disrupting influence on established consumption patterns
 Dynamically continuous innovations
Some disrupting influence on established consumption patterns

Discontinuous innovations
Involves the establishment of new consumption patterns and the creation of previously unknown
products

The idea-finding technique that involves an entrepreneur listing the attributes of an item or problem
and then looking at each from a variety of viewpoints is referred to as ________ ________

Attribute Listing

True or false: The ability to identify or recognize a potential business opportunity is not fundamental to
growing a business. (False)

An entrepreneur who uses the big-dream approach is most likely to _____.

conceptualize ideas without any constraints

The stages that each product goes through from introduction to decline are known as ________
________ ________.

product life cycle

Match the following aspects of parameter analysis (in the left column) with their accurate descriptions

Parameter identification

It involves analyzing variables in a situation to determine their relative importance.

Creative synthesis

One or more solutions are developed by analyzing parameters and the relationships between
parameters.

What is by far the most crucial criterion of a proposed new product idea?

Estimation of market demand

True or false: The major types of innovation based on the uniqueness of an idea are breakthrough
innovation, technological innovation, and ordinary innovation.
True

The first stage in the product development process is the _____

Idea

Products and services that are completely new and fulfill previously unfulfilled functions are most likely
to be _____ innovations.

Discontinuous

During the _____ stage of the product development process, a refined idea is analyzed to evaluate
consumer acceptance.

Concept

An accurate statement about opportunity recognition is that _____.

entrepreneurial alertness and entrepreneurial networks play a crucial role in opportunity

recognition

The stage of the product development process in which consumer reaction to an actual service/product
is determined is the _____

Product development

What are the major stages of the product planning and development process? 

Product development stage

Idea stage
Test marketing stage
Concept stage
Commercialization

In the product development process, the final stage before commercialization is the _____ stage.
 test marketing

While establishing criteria for the stages of the product planning and development process, an
entrepreneur should ensure that _____.

these criteria are all-inclusive and quantitative enough to screen a product in each stage

Match the types of activities involved in managing e-commerce operations that are fully insourced (in the
left column) with their descriptions (in the right column).
Front End Activities
This includes everything that a customer actually sees and interacts with including User
Experience (UX) and User Interface (UI) activities.

Back End Activities

This includes IT infrastructure, analytic tools, payment processing, site search, order tracking,
fulfillment, and inventory management.

What happens in the idea stage of the product development process?

Practical and promising ideas are determined and impractical ones are discarded.

The second stage of the product development process is the Blank______ stage.

Concept

What is the third stage of the product development process?

The product development stage

The stage of the product development process that provides actual sales results that indicate a
product's popularity among customers is the _____ stage.

test marketing
Match the methods used by an entrepreneur to manage an e-commerce site (in the left column) with their
descriptions (in the right column).
Fully insourcing operations
The entrepreneur is prepared to identify the full range activities on the Front End and Back End
and the resources required to manage them.

Fully outsourcing operations

The entrepreneur elects to have one or more firms handle all Front End and Back End Activities
and simply provides the firm who manages their site with updated product descriptions and
pricing information.

During the _____ stage of the product development process, a refined idea is analyzed to evaluate
consumer acceptance.

Concept

A difference between an opportunity assessment plan and a business plan is that

the opportunity assessment plan is used to decide if a company should act on an idea

The first major section of an opportunity assessment plan created by an entrepreneur focuses on _____.

the market requirement for the product

True or false: International entrepreneurship does not consist of exporting and licensing a sales office in
another country.

False

An accurate statement about the PEST analysis is that _____.

it is valuable when exploring new international business opportunities

Entrepreneurs should have an understanding of property rights, contract law, product safety, and
product liability.

True

An attribute of an opportunity assessment plan is that

it is shorter than a business plan

The monetary policy of a country refers to

Interest and exchange rates

Which of the following statements are true of the first major section of an opportunity assessment plan
that is created by an entrepreneur?

It discusses and develops the product or service idea.

It helps identify the uniqueness of the product or service idea in terms of its unique selling
propositions.
It includes an analysis of the competitive products and companies.

The process of an entrepreneur conducting business activities across national boundaries is known as
________ _______.

international entrepreneurship

In the context of the various factors that affect businesses, psychographics refer to _____.

interests, activities, and opinions and help explain what consumers value and how they make their
choices

Identify the major factors that are most likely to define or have an impact on business as identified by
Francis J. Aguilar.

Political
Economic
Social
Technical

________ is a learned behavior that encompasses a wide variety of elements, including language, social
structure, religion, economic and political philosophy, education, manners and customs, and aesthetics

Culture

Identify an accurate statement about the effects of the methods of enacting public policy on business.
Entrepreneurs should understand that court verdicts can also have the effect of law.

Which of the following is true of language?

It is often thought of as the mirror of a country or region's culture.

A country's _____ is the difference between the value of a country's imports and exports over time and
it affects the valuation of its currency and its monetary policy.

current account

an accurate statement about social culture and institutions is that _________

Economic class can have a tremendous

The first major section of an opportunity assessment plan created by an entrepreneur focuses on _____.

the market requirement for the product

Identify the true statements about the influence of political philosophy on businesses

It has an impact on the number of foreign businesses that are allowed to function in a country.
A country's philosophy affects the extent to which profits can be moved across nations.

Psychographics primarily help an entrepreneur _____.

build a target consumer profile

When an entrepreneur seeks to launch a new commodity or good in a new market, the entrepreneur
should _____.

recognize the amount of emphasis the culture places on certain skills or career paths

A characteristic of culture is that _____.

it is the identity of a person and society

True or false: Aesthetics has implications with only gift giving.

False

An accurate statement about language is that _____.

nonverbal language of a culture is as important as verbal language

Which of the following is true of the strategic effects of a company going global?

Psychological closeness to a country will allow the company to conduct its business more easily in the
country.

Which of the following is true of social structure?

it influences the purchasing patterns of individuals.

True or false: Entrepreneurs are recommended to gain entry to a foreign market by partnering up with
an entrepreneur from that particular market.

True

True or false: The political and the economic philosophy of a country has no impact on an
entrepreneur's decision on market entry and how to conduct business transactions.

False

The multilateral agreement with the objective of liberalizing trade by eliminating or reducing tariffs,
subsidies, and import quotas is the _____.

General Agreement on Tariffs and Trade

Entrepreneurs are educators. Hence, before presenting a new product or commodity in a foreign market
or country, entrepreneurs must _____.

comprehend how both informal and formal learning influence the country

Identify the constituent countries of the North American Free Trade Agreement (NAFTA).
Mexico
The United States
Canada

Identify an accurate statement about aesthetics.

It has implications for gift giving, product packaging, and office design.

True or false: Trade barriers typically decrease an entrepreneur's costs of exporting products or
semifinished products to a country.

False

A true statement about psychological distance is that _____.

it is beneficial for companies to first do business in psychologically close countries before moving to
psychologically distant nations

How does an entrepreneur select a good partner in an international market?

By gathering as much data as possible on potential partners

A feature of the General Agreement on Tariffs and Trade (GATT) is that _____.

its voluntary membership means it has limited authority to enforce unrestricted trade

A true statement about the North American Free Trade Agreement (NAFTA) is that it is an agreement
_____.

to decrease trade barriers between constituent countries

Factors that create issues for entrepreneurs by hindering international business are known as .

trade barriers

Any patents, trademarks, copyrights, or trade secrets held by an entrepreneur are known as

intellectual property
A contract between the government and an inventor is known as a

Patent

Which of the following statements is a similarity between a utility patent and a design patent?

Both provide the inventor with a negative right.

A feature of a utility patent is that it

has a 20-year term that begins on the date of filing with the Patent and Trademark Office (PTO)

Which of the following is the initial filing fees for a design patent?

$90

Intellectual property represents significant assets to an entrepreneur and should be understood before
seeking the services of an attorney.

True

Identify the true statements about plant patents.

Very few of these types of patents are issued

these patents are issued under the same provisions as utility patents.

A true statement about a patent is that it

prohibits anyone other than the owner from creating, using, or selling the defined invention

Why did the U.S. Patent and Trademark Office (USPTO) establish the Office of International Patent
Cooperation?

To reduce the ambiguity of International Patenting (IP) rights while decreasing costs.

A difference between a utility patent and a design patent is that

a design patent's issuance fees are usually much lower than that of a utility patent
The initial application to the U.S. Patent and Trademark Office providing evidence of first to market is
known as a

provisional patent application

What is the typical price range of initial filing fees for a utility patent for a small entity?

$70 for an electronic filing to $140 by mail

It is mandatory that a patent application must include

a thorough history and description of an invention and claims for its usefulness

Which of the following are true statements about a design patent?

It applies to new, original, ornamental, and unobvious designs for articles of manufacture

it refers to an object's appearance.

Identify a true statement about the introduction section of a patent application.

It includes the invention's background and advantages and the nature of troubles that it overcomes.

Which of the following are true about plant patents?

They provide the inventor with a negative right and they represent a limited area of interest.

What should be included in the description of invention section of a patent application?

A brief explanation about the drawings that accompany the application, which comply with Patent and
Trademark Office (PTO) requirements

What is the role of the Office of International Patent Cooperation established by the U.S. Patent and
Trademark Office (USPTO)?

To advance toward a more harmonized patent system

Jonathan, an entrepreneur of a startup software company, seeks to patent new software developed.
How can he minimize patent risks?
Seek a patent attorney who has expertise in the product line

It is advisable for an entrepreneur to first file a provisional patent application to _____.

establish a date of the formation of an invention

A feature of a trademark is that it _____.

is able to last indefinitely as long as it continues to perform its indicated function

What are the components of a patent application? (Check all that apply.)

Description of invention
Introduction
Claims

The introduction section of a patent application should contain Blank______.

an explanation about the differences between an invention and existing offerings

Arrange the steps involved in the process of registering a trademark in the correct order of occurrence

1. A simple form that can be downloaded and submitted by email or electronically needs to be
completed to file an application

2. The Patent and Trademark Office (PTO) provides a serial number to a trademark application and sends
a filing receipt to the applicant.

3. An examining attorney at the Patent and Trademark Office (PTO) determines as to whether the
trademark is suitable for registration

Which of the following should be included in the section of a patent application named description of
invention?

Engineering specifications, materials, components, and so on that are important to the real making of an
invention

Why is a trademark published in the Trademark Official Gazette once it is accepted by the Patent and
Trademark Office (PTO)?

To let any party 30 days to oppose or request an extension to oppose

Sarah, an entrepreneur at a startup, seeks to patent a new product. How should she minimize patent
risks?

By consulting a patent attorney who is an expert in the same product line

The protection in a copyright protects an idea itself.

False

A word, symbol, design, or some combination of such, or it could be a slogan or even a particular sound
that identifies the source or sponsorship of certain goods or services is known as a

Trademark

requires protection against others revealing or disclosing information that could be damaging to
business

A trade secret

It is mandatory that a patent application must include

a thorough history and description of an invention and claims for its usefulness

A trade secret's holder has the right to sue any signee who breaches a trade secret nondisclosure
agreement.

True

Identify the requirements for filing of a trademark registration

A drawing of the mark

five specimens that demonstrate the actual use of the mark, 

completion of a written form

A Contractual agreement giving rights to others to use intellectual property in return for a royalty or fee
is known as

Licensing
How long does the entire process of registering a trademark usually take?

13 months from the official filling

Which of the following are true about a patent license agreement?

It should involve an attorney

it must be carefully worded.

Which of the following are true about a patent license agreement?

It should involve an attorney and it must be carefully worded.

Right given to prevent others from printing, copying, or publishing any original works of authorship is
known as a

Copyright

In the context of trade secrets, documents that are prepared by an employer and signed by an employee
in order for the company to protect valuable assets ranging from product information to clients,
marketing ideas, and unique strategies are known as

non-compete agreements

Identify the true statements about a trade secret

It is not covered by any federal law

it is recognized under a governing body of common laws in each state.

Licensing is an important marketing strategy for entrepreneurs who wish to start a new venture but
need permission to copy or incorporate the patent, trademark, or copyright with their ideas.

True

Licensing a trademark generally involves a _____.

franchising agreement
A trade secret's holder has the right to sue any signee who breaches a trade secret nondisclosure
agreement.

true

A written document prepared by an entrepreneur that describes all the relevant external
and internal elements involved in starting a new venture is known as a(n) _ _.
business plan

Identify a true statement about the preparation of a business plan for a new venture.
It should be created by an entrepreneur.

Which of the following make a business plan for a new venture difficult to control and
implement?
Goals and objectives that are too general 
Goals and objectives that are not feasible

Fatima, an entrepreneur, plans to start a retail store in her neighborhood. She plans to
use an upside-down pyramid approach to gathering market information. Arrange the
groups of trends that she needs to analyze as part of using this approach in the order in
which they should be analyzed. (Place the group of trends that needs to be analyzed
first at the top.)
1. General environmental and demographic trends
2. National retail industry trends
3. Local environmental and demographic trends
4. Local retail industry trends
5. Local competition strengths and weaknesses

The significance of a feasibility study of the manufacturing operations by an

entrepreneur of a new venture depends on the nature of the business.
True

A true statement about a business plan for a new venture is that it is usually _____.
a combination of functional plans like marketing, finance, manufacturing, and human
resources

Before preparing the financial section of a business plan for a new venture, an
entrepreneur should _____.
create a budget including lists of possible expenditures in the first year and revenue
sources

How should an entrepreneur decide whether to hire a consultant or to make use of other
resources when preparing a business plan for a new venture?
By assessing his or her own skills objectively

Arrange the contents that should be included in the introductory page of a business plan
for a new venture starting from the information that should appear at the beginning to
the information that should appear at the end.
1. The company's name and address
2. The name of the entrepreneur(s), telephone number, fax number, e-mail address,
and Web site address if available
3. A paragraph explaining the company and the nature of the business
4. The amount of financing needed
5. A statement of confidentiality of the report

Before conducting a quick feasibility study of the business concept of a new venture, an
entrepreneur should ____
precisely state the goals and objectives of the business

Identify a guideline to be followed when preparing the executive summary of a business

plan for a new venture
It should emphasize in a concise and convincing manner the key points in the business
plan.

Liam plans to open a bakery in his town. He decides to use an upside-down pyramid
approach to gathering market information. Arrange the steps that should be taken by
Liam when using this approach in the correct order of occurrence. (Place the first step
at the top).
1. Evaluate general environmental and demographic trends
2. Analyze the trends in the baking industry in the country
3. Assess environmental and demographic trends in the town
4. Analyze the strength and weaknesses of other bakeries in the town

Assessment of external uncontrollable variables that may impact a business plan of a

new venture is known as a(n) _ _.
environmental analysis

Identify the areas in which an entrepreneur requires information when conducting a

feasibility study of the manufacturing operations of a new venture. (Check all that
apply.)
Location, Equipment, Labor Skills, Raw Materials

The section of a business plan for a new venture named description of the venture
should _____.
start with the mission statement or company mission

To prepare the actual budget as part of a business plan for a new venture, an
entrepreneur should _____.
recognize benchmarks in the industry that can be used to form the final pro forma
statements in the financial plan

Match the situations studied in a production plan as part of a business plan for a new
venture (in the left column) with their descriptions (in the right column).
If some or all of the manufacturing process is to be subcontracted
The plan should mention the subcontractor(s), including location, reasons for selection,
costs, and any contracts that have been completed.
If the manufacturing is to be carried out in whole or in part by an entrepreneur
The plan should explain the physical plant layout; the machinery and equipment needed
to perform the manufacturing operations; raw materials and suppliers' names,
addresses, and terms; costs of manufacturing; and any future capital equipment needs.

Identify the true statements about the introductory page of a business plan for a new
venture. (Check all that apply.)
It establishes the basic concept that an entrepreneur is trying to develop.
It gives a brief summary of the business plan's contents.

True or false: All businesses should create an operations plan as part of their business
plan.
True

A requirement for the executive summary of a business plan for a new venture is that it
should _____.
stimulate a potential investor's interest
True or false: Potential investors regard a marketing plan described in a business plan
as critical to the success of a new venture.
True

Match the environmental factors entrepreneurs analyze as part of a business plan for a
new venture (in the left column) with their descriptions (in the right column).
Economy
Economy Drop zone Trends in the GNP, unemployment by geographic area, disposable
income, and so on correct Toggle Button Unavailable.
Trends in the GNP, unemployment by geographic area, disposable income, and so on
Culture
Culture Drop zone Shifts in the population by demographics and shifts in attitudes
correct Toggle Button Unavailable.
Shifts in the population by demographics and shifts in attitudes
Technology
Technology Drop zone Powerful technological developments determined from
resources committed by major industries or the U.S. government correct Toggle Button
Unavailable.
 Powerful technological developments determined from resources committed by major
industries or the U.S. government
Legislation
Legislation Drop zone Any future restrictions that may affect the product or service,
channel of distribution, price, or promotion strategy correct Toggle Button Unavailable.
Any future restrictions that may affect the product or service, channel of distribution,
price, or promotion strategy

Which of the following sections of a business plan for a new venture provides complete
overview of its product(s), service(s), and operations?
The description of the venture

True or false: In an organizational plan as part of a business plan for a new venture, it is
important to detail the shares of stock authorized and share options if the venture is a
partnership
False

A(n) _ _ , which is part of a business plan for a new venture, details how the product(s)
will be manufactured.
production plan
Which of the following sections of a business plan for a new venture identifies potential
hazards and alternative strategies to meet business plan goals and objectives?
the assessment of risk

Which of the following sections of a business plan for a new venture goes beyond the
manufacturing process (when the venture involves manufacturing) and describes the
flow of goods and services from production to the customer?
The operations plan

In a business plan for a new venture, a section projects key financial data that
determine economic feasibility and necessary financial investment commitment. This
section is known as the _ _.
financial plan
A(n) _ _ , which is part of a business plan for a new venture, describes market
conditions and strategy related to how the product(s) and service(s) will be distributed,
priced, and promoted
marketing plan

Which of the following sections of a business plan for a new venture contains backup
material that is not necessary in the text of the document?
The appendix

Assessment of external uncontrollable variables that may impact a business plan of a

new venture is known as a(n) _ _.
environmental analysis

What are the perspectives an entrepreneur should consider in preparing a business

plan for a new venture? (Check all that apply.)
An investor's perspective
The marketing perspective
His or her own perspective

Which of the following is part of a business plan for a new venture that describes a
venture's form of ownership—proprietorship, partnership, or corporation?
The organizational plan

Lenders are considered the potential suppliers of business capital for a new venture.
According to lenders, what are the requirements for a business plan? (Check all that
apply).
It should indicate the amount of personal equity invested by an entrepreneur.
It should show the collateral or tangible assets being secured for a loan.
It should mirror an entrepreneur's credit history.

Arrange the steps that should be taken by an entrepreneur when creating the section
named assessment of risk in a business plan for a new venture in the correct order of
occurrence.
Mention the potential risks to the new venture,
Discuss what might happen if the identified risks become reality,
Discuss the plan that will be executed to prevent, minimize, or respond to the identified
risks

Entrepreneurs can present their business plans for new ventures in colleges and
universities or locally sponsored business meetings in a competitive and structured
setting. How should an entrepreneur make use of this designated period of time?
(Check all that apply.)
By mentioning the recognized risks and how he or she plans to address them
By giving audiences an overview of the marketing program

Match the sections included in the section of a business plan for a new venture named
the financial plan (in the left column) with their descriptions (in the right column).

 Summary of the forecasted sales and the appropriate expenses for at least the
first three years
Includes estimated sales, cost of goods sold, and the general and administrative
expenses
 Cash flow figures for at least three years
Includes the demands on money on a monthly basis, especially in the first year
 Projected balance sheet
Summarizes the assets of a business, its liabilities (what is owed), the investment
of an entrepreneur and any partners, and retained earnings (or cumulative
losses)

Which of the following are examples of information that should be included in the
appendix of a business plan for a new venture? (Check all that apply.
Letters from distributors
Secondary research data

Identify an implication of starting a new business without good planning.

Employees will not understand the business goals.
Match the perspectives an entrepreneur should consider in preparing a business plan
for a new venture (in the left column) with their descriptions (in the right column).
The entrepreneur's perspective
The entrepreneur should precisely articulate what the business is all about.

The marketing perspective

The entrepreneur should view his or her business through the eyes of the customer.

An investor's perspective
The entrepreneur should ensure that there are sound financial projections.

What do lenders, as the potential suppliers of business capital for a new venture,
typically focus on? (Check all that apply.)
Character
Equity contribution
Cash flow
Collateral

As part of measuring the progress of a business plan, an entrepreneur should compare

the cost figures estimated in the business plan with day-to-day operation costs. This
process is part of the control element called _____.
production control

Entrepreneurs can present their business plans for new ventures in colleges and
universities or locally sponsored business meetings in a competitive and structured
setting. In this designated period of time, an entrepreneur is expected to _____.
sell his or her business concept to the audiences

How should an entrepreneur respond to changes in the company, industry, and market?
The entrepreneur should determine what revisions are needed in the current business
plan.
In a business plan for a new venture, a section projects key financial data that
determine economic feasibility and necessary financial investment commitment. This
section is known as the _ _.
Financial plan

An entrepreneur should be prepared for sudden changes or disasters that can affect the
implementation of a business plan. In this context, which of the following are true about
contingency plans? (Check all that apply.)
A contingency plan should be a step-by-step plan.
A contingency plan should be implemented immediately if there is a crisis.

A business plan is primarily designed to _____.

provide guidance to an entrepreneur through the first year of operations

Which of the following is an example of a poorly prepared business plan?

A business plan that lacks an establishment of customer needs for the proposed
product or service

Match the control elements that are assessed by an entrepreneur as part of measuring
the progress of a business plan (in the left column) with their descriptions (in the right
column).
 Inventory control
Making sure that maximum service is provided to customers
 Production control
Controlling machine time, worker hours, process time, delay time, and downtime
cost
 Quality control
Making sure that a product performs satisfactorily
Which of the following is true about the importance of updating an existing business
plan for an entrepreneur?
It helps in being responsive to changes in the company, industry, and market.
An entrepreneur should be prepared for sudden changes or disasters that can affect the
implementation of a business plan. In this context, identify the issues that need to be
addressed by an entrepreneur to have a contingency plan. (Check all that apply.)
The entrepreneur should make a list of any factors that can impact his or her venture.
The entrepreneur should ensure that the contingency plan includes details of who
should be contacted and how in event of a disaster.

Identify the reasons why a business plan for a new venture fails. (Check all that apply.)
An entrepreneur sets unreasonable goals.
An entrepreneur lacks sense of potential threats or weaknesses to the business.

As part of measuring the progress of a business plan, an entrepreneur should set up an effective
collections system for accounts receivable to avoid aging of accounts and bad debts. This process is part
of the control element called _____.

Sales control

What is the implication of the upside-down pyramid approach to industry analysis by an entrepreneur of
a new venture?

The upside-down pyramid approach helps the entrepreneur understand competitors' strengths and
weaknesses.

An entrepreneur of a new venture can gain information on competitors initially by utilizing as much
public information as possible and then complementing this with a marketing research project.

True

Which of the following are conducted as part of marketing research for a new venture? (Check all that
apply.)

Determining who are the prospective buyers for the product

Estimating the size of the potential market

As the first step of marketing research, an entrepreneur should _____.

define the purpose of the research study

What is the most important purpose of reviewing secondary sources as part of the marketing research
for a new venture?

To gather information that will help an entrepreneur make the best decisions regarding the marketing of
a product or service

What is the primary focus of the industry analysis carried out by an entrepreneur of a new venture?

To give sufficient knowledge of the environment that impacts marketing strategy decision making

Which of the following is considered the primary data in the marketing research for a new venture?

Information that is new

In the context of the upside-down pyramid approach to industry analysis, how should an entrepreneur
of a new venture begin competitor analysis?

By documenting the present strategy of each primary competitor

A marketing plan of a new venture differs from its business plan in that the marketing plan _____.

is a standalone document that should be managed on a short-term basis to ensure whether the venture
is meeting its goals and objectives

Shane plans to start a venture that sells customized furniture. Before starting the venture, he conducts
market research. Which of the following steps should be taken by Shane as part of the research?

He should determine the most appropriate mode of selling the furniture.

Which of the following should be determined by an entrepreneur as part of the first step of marketing
research?

How much would prospective customers be ready to pay for the entrepreneur's product or service?
Where would prospective customers prefer to buy the entrepreneur's product or service?

The marketing plan of a new venture primarily establishes the ways in which an entrepreneur will
_____.

effectively compete and operate in the marketplace

In the marketing research for a new venture, secondary resources should be _____.

exhausted before gathering information from primary sources

Identify the requirements for an effective marketing plan of a firm

It should be supported by facts and valid assumptions.

It should provide a strategy for achieving the firm's mission or goal.

Match the components used to gather primary data in the marketing research for a new venture

A data collection procedure - Involves observation or networking

A data collection instrument - Involves a questionnaire

A description of past and present business achievements of a new venture is called a(n) ________
________. It is part of preparing a marketing plan for a new venture.

situational analysis

Match the plans involved in starting a venture (in the left column) with their descriptions (in the right
column).

A marketing plan - It primarily concentrates on all marketing activities of a venture for one year or more.
A business plan - It involves marketing, research and development, operations, manufacturing,
personnel, financial projections and analysis, and future growth strategies.

A specific group of potential customers toward which a venture aims its marketing plan is known as a(n)
________ ________.

target market

Which of the following are conducted as part of marketing research for a new venture?

Determining who are the prospective buyers for the product

Estimating the size of the potential market

All marketing goals and objectives of a new venture must be quantified.

False
Identify the true statements about the marketing plan of a new venture.

It should be created annually, evaluating the goals and objectives for the next year.
It should be integrated with the venture's more long-term strategic plan.

Which of the following represents the definition of marketing strategy and action plan?

Specific activities outlined to meet a venture's business plan goals and objectives

Isabella, an entrepreneur, prepares a marketing plan for her new venture that manufactures consumer
goods. To make her venture's marketing plan effective, she should ensure that the plan _____.

mentions performance criteria that will be monitored and controlled

Which of the following is true about the definition of a product or service in the marketing plan?

The product or service definition may consider more than the physical characteristics.

As part of preparing a marketing plan for a new venture, an entrepreneur should define the business
situation. When defining the business situation, the entrepreneur should _____.

evaluate past performance of the product and the company

Based on the marketing strategy and action plan of a new venture, match the situations of a
marketplace (in the left column) with its effects on the pricing of a product or service (in the right
column).

A situation where a product or service is in a nondifferentiated market - An entrepreneur has little room
for price variations from the competition.
A situation where a product or service is unique in the marketplace - An entrepreneur has flexibility for
price variations from the competition.

What is the implication of knowing the target market for a product or service?

It is the basis for deciding the appropriate marketing action strategy that will effectively meet the
market's needs.

Which of the following is a factor of the marketing mix that provides utility to the customer?

Distribution
Statements of level of performance desired by a new venture are known as _____.

marketing goals and objectives

Identify the reasons why business-to-business marketing strategy typically involves a more direct
channel of distribution than does a consumer market. (Check all that apply.)

Because of the volume of each transaction

Because of the need to relate product knowledge to business buyers

Identify a true statement about decisions on the marketing strategy and action plan of a new venture.

They reflect on the marketing mix variables.

Which of the following is true about the definition of a product in a marketing plan?

The definition of a product is more than its physical components.

When considering the pricing of a product or service in a situation where the product or service is
unique in the marketplace, an entrepreneur should _____.

have a precise understanding of the inherent costs

Match the situations in the market that are related to the distribution of a product or service (in the left
column) with the guidelines an entrepreneur should follow in those situations (in the right column).

A situation in which the market for a new venture is highly concentrated, such as a major metropolitan
area - It is advisable for an entrepreneur to consider direct sales to the customer or to a retailer rather
than using a wholesaler.
A situation in which the market is dispersed across a wide geographic area - It is advisable for an
entrepreneur to utilize a longer channel with wholesalers and retailers as the cost of direct sales may be
prohibitive.

A difference between a business-to-business market and a consumer market is that advertising and
promotion for the business-to-business market _____.

include more direct sales and trade shows

What are the basic legal forms of business formation?

Partnership
Proprietorship
Corporation

Match the forms of business formation (in the left column) with their features related to their
ownership (in the right column).

A proprietorship: A form of business with single owner who has unlimited liability, controls all
decisions, and receives all profits

A partnership: A form of business with two or more individuals having unlimited liability who
have pooled resources to own a business

A corporation: A form of business with a separate legal entity that is run by stockholders having
limited liability

Liability is a critical reason for establishing a _____ rather than any other form of business.

Corporation

Identify a true statement about a proprietorship and regular partnership.

There will be no distinction between the business entity and the owner(s).

What are the legal requirements owners should fulfill before forming a corporation?

Owners should meet the state statutory needs.

Owners should register the name and articles of incorporation.

A(n) is the most common form of corporation, regulated by statute and treated as a separate
legal entity for liability and tax purposes.

C Corporation

What happens to a sole proprietorship if its owner dies?

It results in the termination of the business.

Identify a true statement about the ownership pattern of limited liability partnerships (LLPs).

In LLPs, a partnership is considered a legal entity.

Drag and drop the right to transfer of interest in a business against the corresponding forms of
business.

A sole proprietorship - An entrepreneur has the freedom to sell or transfer any assets in the
business.
A limited liability partnership (LLP) - A single partner cannot carry out the transfer of interest.

Owners are liable only for the amount of their investment unless there is negligence or fraud
involved in the form of business called a _____ as it is an entity, which is taxable and absorbs
liability.

Corporation

Match the forms of business (in the left column) with the descriptions on their capital
requirements (in the right column).

A proprietorship - Any new capital can be gained only from loans by any number of sources or
by additional personal contributions by an entrepreneur.

A partnership - Loans can be obtained from banks but will likely need a change in the
agreement involved in the business.

A corporation - New capital can be raised in a number of ways such as selling stocks or bonds.

Which of the following is true about limited partners in a general partnership?

They are liable for only their contribution to the partnership.

Identify a true statement about limited partners in a general partnership.

They lack control over business decisions.

Which of the following is the least expensive form of business to start?

A proprietorship

True or false: In a partnership, the distribution of profits and losses is based on the partnership
agreement.

True

Match the kinds of partnerships (in the left column) with the effects on them when one of the
entrepreneurs dies or withdraws from the business (in the right column).

A general partnership - Death or withdrawal leads to the termination of the partnership unless
the partnership agreement states otherwise.
A limited liability partnership (LLP) - Death or withdrawal does not affect the continuity of the
business.

Identify the forms of business that are the least attractive for raising capital, primarily owing to
the problem of personal liability. (Check all that apply.)

A proprietorship

A partnership

Which of the following forms of business has the most freedom in terms of selling one's interest
in the business?

A corporation

Which of the following is true about limited liability companies (LLCs)?

Currently, regulations allow an LLC to be automatically taxed as a partnership.

An LLC is similar to an S corporation.
True or false: A proprietorship is likely to require a larger sum of capital than the capital needed
for a partnership or corporation.

False

The standard acceptable term of a limited liability company (LLC) is _____.

30 years

Identify a true statement about management control in a corporation

It is separated based on the types of business decisions.

Identify the advantages of a limited liability company (LLC) over an S corporation. (Check all that
apply.)

Its members are allowed to share income, profit, expense, deduction, loss and credit, and
equity among themselves.

It can be formed by one or more individuals, corporations, partnerships, trusts, or other

entities.

What is the implication of losses incurred by a corporation?

It results in no dividends to stockholders.

What is the primary concern of an organization's manager as an entrepreneur?

To cope up with changes in the environment and attempt to find new ideas

Which is the most appealing form of business for raising capital due to its advantages regarding
personal liability?

A corporation
An entrepreneur should be able to assign responsibility to people in order to create a vibrant
organizational culture.

True

Which of the following has been the reason for the decline in the growth rate of the formation
of S corporations in the last few years in the United States?

The acceptance of limited liability companies (LLCs) in all states

Identify the functions served by a board of directors in an organization. (Check all that apply.)
Examining operating and capital budgets
Creating a network of information sources for the entrepreneurs
Building longer-term strategic plans for growth and expansion

Identify the characteristics of a limited liability company (LLC). (Check all that apply.)
It is typically treated by the Internal Revenue Service as partnerships for tax purposes.
It allows a member to transfer his or her interest only with the unanimous written consent of
the remaining members.

An advantage of a limited liability company (LLC) over an S corporation is that an

LLC Blank______.

may have tax advantages depending on the state in which the business operates

Match the areas in which entrepreneurs can indicate to the members of an organization what is
expected of them (in the left column) with their descriptions (in the right column).
Organization structure - Explains members' jobs and the communication and relationship these
jobs have with each other
Rewarding - Provides member with promotions, bonuses, praise, and so on
Selection criteria - Defines a set of guidelines for choosing individuals for each position

What are the functions the management team of an organization must accomplish?

Recognition of the basic changes in the business as they occur

Execution of the organization's business plan
Maintenance of profitability by making adjustments to the organization's plan based on
changes in the environment and market

A function served by a board of directors in an organization is that it Blank______.

finds solutions to conflicts among owners or shareholders

Which of the following business forms is considered a partnership-corporation hybrid?

A limited liability company (LLC)